As the American arm of an Israeli bank, Bank Leumi USA naturally has a reputation as an institution that targets the Jewish community.
But after several years of restructuring in which it scaled back in New York and bulked up in California and Florida, the $4.5 billion-asset company is seeking to widen its customer base by touting its niche-lending and private-banking expertise.
Chief executive officer Zalman Segal has been spreading the message recently at events celebrating the centennial of the parent company, $50 billion-asset Bank Leumi Le-Israel in Tel Aviv.
In the past month Mr. Segal has hosted receptions in New York, Chicago, and Los Angeles for customers and prospects and met with branch managers to discuss ways of diversifying its customer base within its current industry categories.
Bank Leumi USA, which is based in New York, also hired a new marketing director in January whose job is to raise its U.S. profile among all ethnic groups. Leslie B. Kahle, a former employee who had lost her job in the restructuring, was brought back and has redesigned brochures and other material and repositioned the company's advertising.
"We still advertise in certain ethnic publications, but they're not just Jewish anymore," Ms. Kahle said. "I've tried to make the advertising more sophisticated so it appeals across the board."
Mr. Segal would not disclose the ethnic breakdown of its customer base, but said that the typical Bank Leumi customer is a small-business owner dealing in apparel, diamonds, or jewelry and doing international trade.
These were traditionally Jewish businesses when Bank Leumi opened a U.S. office in New York in 1954, but they have since become more eclectic in ownership, and Bank Leumi is going after them, he said.
"Once we are known in an industry, Jewish or non-Jewish is not a consideration," Mr. Segal said. He added that the bank has already developed a large customer base among Indian jewelers in the United States, who often buy and sell diamonds in India.
Bank Leumi USA has also hired 30 private bankers and business development officers in the last five years and stepped up efforts to win the private banking business of the company owners it lends to, along with high-net-worth individuals.
The company has long had units in such money centers as Zurich, Hong Kong, and Buenos Aires. And it is certainly in the right U.S. ZIP codes. Aside from New York and Chicago, the U.S. unit also has branches in such affluent markets as Boca Raton, Fla., Beverly Hills, and Silicon Valley.
For the past five years Bank Leumi USA has been restructuring after running into trouble with real estate credits in the 1990s. It lost $145 million from 1990 to 1992, primarily from bad real estate loans. Afterward it went from 22 branches to three in New York and cut nearly two-thirds of its work force, leaving it with 378 employees by yearend 2000.
Starting in early 2001, however, Bank Leumi USA rapidly reversed course. In California it opened branches in San Jose, Beverly Hills, and Encino. In Florida it recently bought $6 million of assets and $23 million of deposits from the failed Net First National Bank of Boca Raton, and it entered Miami last week by buying a branch of its parent company (which got its start in London as the Anglo-Palestine Co.).
Mr. Segal said the company liked California because it is home to a lot of high-tech outfits that trade with technology companies in Israel. One reason it established itself in Florida was that its parent has offices throughout Latin America and wants to expand its international trade business from the United States in that market.
"We are now geographically present in the areas we wanted," he said.
Mr. Segal has set a goal of getting return on equity of 14% to 15% a year. Its ROE in 2001 was 11.7%.
Seth G. Charnes, a certified public accountant and the president of Seth G. Charnes Tax and Business Services Inc. in Highland Park, Ill., said he thinks Bank Leumi's strategy of targeting all exporters - not just Jewish-owned businesses - will work. He said he recommends the company to all his clients, regardless of their backgrounds, who need letters of credit for international transactions.
"They are particularly good at handling export-import issues," Mr. Charnes said. He added that despite its size, Bank Leumi's abilities in international finance are on par with such giants as Citigroup Inc., LaSalle National Bank, and Bank One Corp.
